Power Up: Unions, liberal groups urge Biden to go even bigger on tax hikes for infrastructure plan

FIRST IN POWER UP: President Biden’s infrastructure agenda is getting a big thumbs up from an influential coalition of unions, nonprofits, and progressive organizations. But they’re encouraging him to think even bigger about tax hikes even as congressional Republicans say that’s a non-starter to get their support. 

Eighty-one organizations — Led by Americans for Tax Fairness, a left-leaning think tank — sent a letter to Biden today citing public opinion polls that show raising taxes on the wealthy and corporations to be popular “even among rank-and-file Republicans.” They’re asking him to follow through on campaign promises to ensure wealthy people and corporations “pay something closer to their fair share of taxes.” 

• “We think one could definitely go bolder,” Frank Clemente, the executive director of ATF, told Power Up of Biden’s proposed tax hikes. “One could raise a lot more revenue to do a lot more to create an economy that works for all of us.” 
• Some notable backers include: the AFL-CIO; American Federation of State, County and Municipal Employees; American Federation of Teachers; Asian Pacific American Labor Alliance; MoveOn; Oxfam; Public Citizen.

Biden’s “Build Back Better” jobs and infrastructure package, the cornerstone of his economic agenda, could top $4 trillion. The administration is eyeing as much as $3 trillion in new tax hikes to pay for it. 

• The approximately $2 trillion part of the plan expected to be introduced in Pittsburgh today includes more than $600 billion to rebuild the country’s infrastructure, such as its roads, bridges, highways and ports, per Jeff Stein, Juliet Eilperin, and Michael Laris. “A second economic proposal to be released in April is expected to include a major expansion in health insurance coverage, subsidies for child care and free access to community colleges, among other measures.”

What’s already on the table: “On the tax side, Biden’s plan includes raising the corporate tax rate from 21 percent to 28 percent; increasing the global minimum tax paid from about 13 percent to 21 percent; ending federal tax breaks for fossil fuel companies; and ramping up tax enforcement against corporations, among other measures,” per our colleagues. 

What the unions and liberal groups want: The list includes a ‘financial risk fee’ on large Wall Street banks; an end to tax breaks for the real estate, fossil fuel and pharmaceutical drug advertising industries; a 15 percent minimum tax on profits reported by big corporations. It also wants Biden to stick to his campaign plan to return the top marginal tax rate on the highest incomes from 37 percent to 39.6 percent; restore the estate tax to its 2009 levels; cap the value of itemized deductions at 28 percent for the wealthiest taxpayers; and tax capital gains on inherited property. 

• “While we strongly support the Biden-Harris administration’s laudable plans to roll back parts of the 2017 GOP tax giveaway package and increase taxes on the rich and corporations, Public Citizen urges the president to embrace additional policies that meet his tax criteria such as a tiny fee on Wall Street trades,” Susan Harley, the managing director of the nonprofit consumer advocacy organization’s Congress Watch division told Power Up in a statement. “We look forward to working hand-in-hand with this administration to usher a new era of tax fairness into reality.”

The support from organized labor groups is notable: while Biden has promoted himself as union-friendly, his close ties with corporate CEOs and lobbyists initially concerned progressives and labor leaders. Yet halfway through the Biden administration’s first 100 days, the president has been mostly applauded by labor advocates for his pro-union positions.

It remains to be seen where Democrats can find total consensus on tax increases to use budget reconciliation to approve a package with a narrow majority. 

• “The scale of the infrastructure program — one of the most ambitious attempts in generations to shore up the nation’s aging roads, bridges, rail lines and utilities — is so big that it will require 15 years of higher taxes on corporations to pay for eight years of spending,” people briefed on the plan told the Times.
• Republicans are not on board with the idea of tax hikes: They say they “will damage U.S. competitiveness and drain the nation of vital economic activity as it struggles to rebound from the pandemic,” per our colleagues. 

By the numbers: Asked about the potential for moderate Democrats to balk at Biden’s tax hikes, Clemente said that Americans for Tax Fairness has been providing Democratic lawmakers with polling since 2012 that raising taxes “is a winning issue.” They’re working with Biden’s top campaign pollster, John Anzalone, who created a presentation arguing that the most popular economic proposal of the 2020 cycle was raising taxes on the wealthy. 

• “Democrats were in the zone playing defense against the Trump tax cuts … now we’re in an environment where we have to go on the offense and have to be affirmatively for a fair share in the tax system,” Clemente added. “Going on the offense is a little bit harder for folks but every time you run against Republicans, they’ll bash you as a tax-raising Democrat whether you do it, so you might as well do it — because it’s a winning message and that’s what Biden’s election showed.” 

And House Democrats — Reps. Bill Pascrell Jr. (D-N.J.), Tom Suozzi (D-N.Y.), Josh Gottheimer (D-N.J.) and Tom Malinowski (D-N.J.) are all saying they would not consider Biden’s tax proposals unless he agrees to reinstate the State and Local Tax (SALT) deduction capped under Trump.

• Some tax experts, however, estimate that the benefits of restoring the deduction would go to the richest Americans: “House Democrats included a provision suspending the cap for 2020 as part of a COVID relief package last year. [The Institute on Taxation and Economic Policy] estimated that this would cost more than $90 billion in a single year. We found that 62 percent of the benefits would go to the richest 1 percent and 86 percent would go to the richest 5 percent,” according to a study by Institute on Taxation and Economic Policy. 

REP. MATT GAETZ FACES DOJ INVESTIGATION OVER ALLEGED RELATIONSHIP WITH TEEN GIRL: “The Justice Department is investigating Rep. Matt Gaetz over an alleged sexual relationship with an underage girl, though the probe has been complicated by the congressman’s assertion that his family is being extorted,” our colleague Matt Zapotosky reports.

• “The investigation into Gaetz began some time last year, after a criminal case against a different Florida politician, [former Seminole County tax collector Joel Greenberg,] led investigators to allegations that the congressman had a sexual relationship with a 17-year-old girl and paid for her travel.”
• Gaetz repeated the extortion claim in a statement, alleging that a former Justice Department employee, whom he did not identify, had been “seeking $25 million while threatening to smear my name.”
• Gaetz said he and his father, Don Gaetz, “had been cooperating with the F.B.I. and ‘wearing a wire’ after they were approached by people saying they could make the investigation ‘go away,’” the New York Times’s Michael S. Schmidt, Katie Benner and Nicholas Fandos report. “Gaetz claimed the disclosure of the sex trafficking inquiry was intended to thwart an investigation into the extortion plot.”

Gaetz appeared on Fox News Tuesday evening to dispute the claims.

NEW PHOTOS PAINT GRIM PICTURE OF BORDER CONDITIONS: “The Biden administration allowed reporters for the first time Tuesday to go inside the crowded border tents where record numbers of migrant teenagers and children have been held in recent weeks after crossing into the United States without their parents,” our colleague Nick Miroff reports. “The Washington Post was not included but received a report.”

• “Department of Homeland Security officials permitted the Associated Press and a camera crew to tour the Donna, Tex., temporary processing facility run by U.S. Customs and Border Protection, where 3,400 unaccompanied minors were in custody Tuesday along with 700 members of migrant families.”
• “Children, jammed hundreds to a single pod intended for fewer than 50, were lying down shoulder to shoulder across the 3,200-square-foot space, crumpled aluminum blankets covering some of them. Many of the pods held more than 500 children,” the New York Times’s Miriam Jordan reports. “In a playpen area, a 3-year-old girl was being tended to by her brother, 11.”
• They need more space. “The United States currently has more than 17,600 beds for the minors in tent camps, emergency facilities and shelters, according to the internal documents. The administration is projecting it will need more than 35,500 beds by the end of May.”

INSIDE THE PUSH TO EXPAND VOTING RIGHTS: “Democrats in Congress are quietly splintering over how to handle the expansive voting rights bill that they have made a centerpiece of their ambitious legislative agenda, potentially jeopardizing their chances of countering a Republican drive to restrict ballot access in states across the country,” the New York Times’s Nicholas Fandos and Michael Wines report. 

• “As currently written, the bill constitutes a sweeping liberal wish list that includes restoring voting rights to felons who have served their sentences, making it easier to register and vote, reining in undisclosed campaign donations, securing elections against cyberattacks and ending the partisan gerrymandering of congressional districts.”
• “The details of the more than 800-page bill have become a point of simmering contention … with Sen. Joe Manchin III (D-W.Va.) opposed to the measure in its current form.”
• Meanwhile, some Democrats fear that “after Trump spent months falsely claiming that Democrats were cheaters trying to rig the 2020 election against him, independent voters will view the legislation as an attempt to do just that and punish the party in the 2022 midterms.”

FOUR MINORS, INCLUDING A 9-YEAR-OLD, TAKE CENTER STAGE IN MURDER TRIAL: “Several eyewitnesses [were] called to the stand Tuesday, including four girls who were under 18 when they saw [George Floyd] being held to the ground by [Derek Chauvin],” our colleague Holly Bailey reports. “The jury also heard from firefighter Genevieve Hansen, who was off-duty and came across the scene while on a walk.”

• “It’s been nights I stayed up apologizing and apologizing to George for not doing more and not physically interacting and not saving his life,” said Darnella Frazier, who was 17 when she filmed the viral video. 
• “Hansen burst into tears as she recounted begging officers to check Floyd’s pulse but being rebuffed.” 
• The witnesses’s “stories were an expression of the trauma of a city that is still struggling to rebuild physically and emotionally from last summer’s unrest,” the New York Times’s John Eligon, Tim Arango and Nicholas Bogel-Burroughs report

GOV. PLEADS FOR VACCINE SURGE AS NATION BRACES FOR FOURTH WAVE: “Michigan Gov. Gretchen Whitmer (D), battling a surge of coronavirus infections in her state, appealed on Tuesday to White House officials to shift away from a strict population-based formula for vaccine allocation and instead rush more doses to hard-hit parts of the country,” our colleague Isaac Stanley-Becker reports. 

• “The inquiry reflects growing unease among state officials on the front lines of what health experts say could be a new wave of the virus. And it illustrates the pressure Biden is under to show he is taking steps to address disquieting trends after a prolonged period of declining infections.” 
• “The accelerating pace of inoculations has not been sufficient to fend off case increases as more-transmissible variants circulate in the United States, especially among young people who have fallen sick in outbreaks tied to schools.”
• Michigan snapshot: As of Tuesday, Michigan’s seven-day average of new daily cases stood at 5,409, a 52 percent increase from a week ago and the steepest increase nationwide, according to Post data.

Meanwhile, “White House press secretary Jen Psaki on Tuesday criticized China for a lack of cooperation that she suggested hindered the findings of a World Health Organization report on the origins of the coronavirus,” our colleague John Wagner reports.

• “They have not been transparent,” Psaki said of China during a White House briefing. “They have not provided underlying data. That certainly doesn’t qualify as cooperation.”
• WHO Director General Tedros Adhanom Ghebreyesus echoed the same criticism, telling member states “there is a particular need for a ‘full analysis’ of the role of animal markets in Wuhan and that the report did not conduct an ‘extensive enough’ assessment of the possibility the virus was introduced to humans through a laboratory incident,” our colleague Emily Rauhala reports.
• “The comments came as the team tasked with probing the origins of the coronavirus pandemic issued a report on its roughly month-long visit to [Wuhan]. The report offers the most detailed look yet at what happened in the early days of the outbreak but leaves key questions unanswered and has been overshadowed by concern about Chinese influence.”